Unassociated Document


    ATLANTIC
COAST BANK

    2005
AMENDED AND RESTATED

    DIRECTOR
RETIREMENT PLAN

     

    The
Atlantic Coast Bank 2005 Amended and Restated Director Retirement Plan (the
“Plan”) was originally established on July 1, 2001, was amended and restated
effective January 1, 2005, and is amended and restated effective December 11,
2009 in order to make certain changes to the Plan’s vesting and benefit
calculation provisions.

     

    The
purpose of the Plan is to provide retirement benefits to those non-employee
members of the Board of Directors (“Directors”) who have contributed
significantly to the success and growth of Atlantic Coast Bank (the “Bank”) and
its holding company, Atlantic Coast Federal Corporation (the “Company”) (and any
successors thereto), and the Bank’s predecessor, Atlantic Coast Federal Credit
Union, whose services are vital to its continued growth and success in the
future and who are to be encouraged to remain a member of such Boards until
retirement.

     

    ARTICLE
I

    ELIGIBILITY
AND VESTING

     

    1.1          Eligibility.  Each
individual who is a Director of the Bank (or any predecessors or successors)
shall be eligible to participate in the Plan (“Participants”).

     

    1.2          Vesting.

     

    (a)           Participants
shall vest in their benefits under this Plan upon the earliest to occur of the
date (i) Atlantic Coast Federal, MHC completes a Second-Step Conversion (as
defined below), (ii) of a Change in Control, (iii) the Participant dies pursuant
to Section 2.2, or (iv) the Plan Administrator, in its sole discretion,
accelerates vesting.  Notwithstanding the preceding provisions, any
Participant who resigns at the request of, or is removed from service by, the
Office of Thrift Supervision, Federal Deposit Insurance Corporation or any other
regulatory authority for the Bank, shall be ineligible to participate and shall
forfeit any benefits under this Plan.

     

    (b)           “Second-Step
Conversion” means the conversion and reorganization of Atlantic Coast Federal,
MHC, the Company and the Bank from a mutual holding company structure to a fully
public ownership structure.

     

    (c)           “Change
in Control” means the
following:

     

    (i)           A “change in the ownership” of the Bank
or the Company, a “change in the effective control” of the Bank or the Company,
or a “change in the ownership of a substantial portion of the assets” of the
Bank or the Company, each described below.  Notwithstanding anything
herein to the contrary, a Second-Step Conversion shall not be deemed a Change in
Control.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    (ii)          A
“change in ownership” occurs on the date that anyone person, or more than one
person acting as a group (as defined in Treasury Regulation Section
1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or Company that,
together with stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of
such corporation.

     

    (iii)         A
“change in the effective control” of the Bank or Company occurs on the date that
either (A) anyone person, or more than one person acting as a group (as defined
in Treasury Regulation Section 1.409A-3(i)(5)(vi)(B)) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Bank or Company possessing 30
percent or more of the total voting power of the stock of the Bank or Company,
or (B) a majority of the members of the Bank’s or Company’s board of directors
is replaced during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Bank’s or Company’s
board of directors prior to the date of the appointment or election, provided
that this subsection (B) is inapplicable where a majority shareholder of the
Bank or Company is another corporation.

     

    (iv)         A “change in a substantial portion of
the assets” of the Bank or the Company occurs on the date that anyone person or
more than one person acting as a group (as defined in Treasury Regulation
Section 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or
persons) assets from the Bank or Company that have a total gross fair market
value equal to or more than 40 percent of the total gross fair market value of
(A) all of the assets of the Bank or Company, or (B) the value of the assets
being disposed of, either of which is determined without regard to any
liabilities associated with such assets.  For all purposes hereunder,
the definition of Change in Control shall be construed to be consistent with the
requirements of Treasury Regulation Section 1.409A-3(i)(5), except to the extent
that such regulations are superseded by subsequent guidance.

     

    ARTICLE
II

    BENEFIT

     

    2.1          Appreciation
Benefit.


     

    (a)           Upon
the earlier to occur of (i) “Separation from Service” (as defined below) at or
after age sixty-five (65) (“Normal Retirement Age”), or (ii) the closing date of
a Second-Step Conversion, the Bank shall pay the Participant their vested
“Appreciation Benefit” (as defined below) payable in equal monthly installments
over a period of One Hundred Twenty (120) months (the “Benefit Period”),
commencing on the first day of the month following the date payment is scheduled
to commence.  Any Participant who has at least 240 full months of
service, whether continuous or otherwise, may receive such annual benefit for
the Benefit Period upon Separation from Service prior to age of 65 provided that
the Separation from Service follows a Second-Step Conversion.


    
      
         


      

      
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    (b)           “Separation
from Service” means the Participant’s retirement or termination from service
from the Board. For these purposes, a Participant shall not be deemed to have a
Separation from Service until the Participant no longer serves on the Board of
the Bank, the Bank’s holding company, or any member of a controlled group of
corporations with the Bank or holding company within the meaning of Final
Treasury Regulation §1.409A-l(a)(3).  In addition, service on the
Board of the Bank as an “emeritus director” will not constitute a Separation
from Service until such individual ceases to serve in such
capacity.  Whether a Participant has had a Separation from Service
shall be determined in accordance with the requirements of Final Treasury
Regulation §1.409A-l(h).

     

    (c)           “Appreciation
Benefit” means mean an amount equal to the Prior Benefit Component (as defined
below) plus the Stock Award Component (as defined below) plus the Stock
Ownership Component (as defined below) multiplied by the Issue Price (as defined
below) multiplied by the Exchange Ratio (as defined below).  For
example, if the Participant’s Prior Benefit Component had 20,000 shares of
common stock of the Company (“Company Stock”), the Stock Award Component had
30,000 shares of Company Stock and the Stock Ownership Component had 25,000
shares of Company Stock; the Issue Price was $10.00 and the Exchange Ratio was
60 percent, then the Participant’s Appreciation Benefit would be equal to
$450,000 [(20,000+30,000+25,000)($10.00)(.6)].  The Company will pay interest on unpaid
balance of the Executive’s Appreciation Benefit at the rate of three percent per
annum.

     

    (i)           “Prior
Benefit Component” shall mean a number of shares of Company Stock equal to the
Participant’s benefit under the Agreement as of December 11, 2009, divided by
the Fair Market Value of Company Stock (as defined below) on December 11,
2009.  For example, the Participant’s prior benefit under the terms of
the Agreement on December 11, 2009 was $40,000 and the Fair Market Value of
Company Stock on December 11, 2009 was $2.00.  The Participant is
deemed to have, for purposes of the Agreement, 20,000 shares of Company Stock
($40,000/$2.00) in the Prior Benefit Component.  For purposes of the
Plan, “Fair Market Value of Company Stock” means the per share closing price of common stock
of the Company, as reported by the principal exchange or market over which the
shares are then listed or regularly traded.

     

    (ii)          “Stock
Award Component” shall mean the number of shares of Company Stock awarded to the
Participant under the Atlantic Coast Federal Corporation 2005 Recognition and
Retention Plan that are still held by the Participant on December 11,
2009.

     

    (iii)         “Stock
Ownership Component” shall mean the number of shares of Company Stock directly
or beneficially owned by the Participant (as that term is defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
disregarding any beneficial ownership of stock options) as of December 11,
2009.


    
      
         


      

      
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    (iv)         “Issue
Price” shall mean the initial offered price of the common stock of the newly
formed successor corporation that is issued in connection with the Second-Step
Conversion.

     

    (v)    
     “Exchange Ratio” shall mean the ratio used to
determine the number of shares of common stock in of a successor corporation
each share of Atlantic Coast Federal Corporation will exchanged for in a
Second-Step Offering. The Exchange Ratio will be determined as part of the
independent valuation conducted in connection with the Second-Step
Offering.

     

    In the event the Participant dies
pursuant to Section 2.2, or there is a Change in Control prior to the date of
closing of the Second-Step Conversion, the Fair Market Value of Company Stock as
of the date of death or Change in Control will be substituted for the Issue
Price and the Exchange Ratio as of the date of closing of the Second-Step
Conversion.  For example, the Participant dies prior to the closing of
the Second-Step Conversion.  The Fair Market Value of Company Stock on
that date is $4.00 per share.  In this instance, the Participant’s
Appreciation Benefit is $300,000 [(20,000+30,000+$25,000)*$4.00]. The Company
will pay interest on unpaid balance of the Participant’s Appreciation Benefit at
the rate of three percent per annum.

     

    In the
event of any change in Company Stock through stock dividends, split-ups, stock
splits or reverse stock splits, recapitalizations, reclassifications,
conversions or otherwise, then the Board will make appropriate adjustment or
substitution in the aggregate value of the Prior Benefit Component, the Stock
Award Component and the Stock Ownership Component.

     

    2.2          Death
Benefit.  In
the event a Participant dies and has at least 60 full months of service with the
Bank, the Company or one of their affiliates or subsidiaries, (whether
continuous or otherwise), then the Participant will become vested in his or her
Appreciation Benefit.  Such Appreciation Benefit shall be paid to the
Participant’s “Beneficiary” (as defined below) in a lump sum on the first
business day of the month following the Participant’s death.  If a
Participant dies prior to attaining 60 full months of service, and is not
otherwise vested, then he or she will forfeit his or her Appreciation
Benefit.  “Beneficiary” means the person(s) designated by the
Participant on the form set forth at Appendix A to receive
any death benefits hereunder. If the Participant has not designated a
Beneficiary, the Participant’s spouse shall be the Beneficiary.  In
the absence of any surviving Beneficiary or spouse, the benefits shall be paid
to the Participant’s estate.

     

    2.3          Unforeseeable
Emergency.

     

    (a)           Upon
an “Unforeseeable Emergency” (as defined below), (i) a Participant who is vested
in his or her benefit hereunder but has not yet begun to receive payments; or
(ii) a Participant who is receiving Appreciation Benefits, may request a lump
sum payment in an amount necessary (but not exceeding the present value of the
remaining benefits) to meet the Unforeseeable Emergency, including an amount
necessary to pay any taxes due as a result of such lump sum payment from the
Plan. The present value shall be equal to the amount accrued by the Bank in
accordance with generally accepted accounting principles.


    
      
         


      

      
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    (b)           “Unforeseeable
Emergency” means a severe financial hardship to the Participant or Beneficiary
resulting from (i) an illness or accident of the Participant or Beneficiary, his
or her spouse, or dependent (as defined in Code Section 152(a)); (ii) loss of
the Participant’s or Beneficiary’s property due to casualty; or (iii) other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant or Beneficiary.  The term
“Unforeseeable Emergency” shall be construed consistent with Code Section 409A
and the final regulations and other guidance issued thereunder.

     

    (c)           Tax
Withholding.  All benefits paid under this Plan shall be
subject to withholding in accordance with federal and state law.

     

    ARTICLE
III

    ADMINISTRATION
CLAIMS PROCEDURES

     

    3.1          Plan
Administrator.  The
Board of Directors of the Bank (the “Board”) is hereby designated the Plan
Administrator.

     

    3.2          Powers of Plan
Administrator.  As
Plan Administrator, the Board shall be responsible for the management, control,
interpretation and administration of this Plan and may allocate to others
certain aspects of the management and operational responsibilities of the Plan
including the employment of advisors and the delegation of any ministerial
duties to qualified individuals. All decisions of the Plan Administrator shall
be final and binding on all persons.

     

    3.3          Claims
Procedures.  Claims for benefits hereunder shall be submitted
to the President of the Bank, as agent for the Plan Administrator. In the event
a claim for benefits is wholly or partially denied under this Plan, the
Participant or any other person claiming benefits under this Plan (a
“Claimant”), shall be given notice of the denial in writing within thirty (30)
calendar days after the Plan Administrator’s receipt of the claim. The Plan
Administrator may extend this period for an additional thirty (30) calendar
days. Any denial must specifically set forth the reasons for the denial and any
additional information necessary to perfect the claim for benefits. The Claimant
shall have the right to seek a review of the denial by filing a written request
with the Plan Administrator within sixty (60) calendar days after receipt of the
initial denial. Such request may be supported by such documentation and evidence
deemed relevant by the Claimant. Following receipt of this information, the Plan
Administrator shall make a final determination and notify the Claimant within
sixty (60) calendar days of the Plan Administrator’s receipt of the request for
review together with the specific reasons for the decision.


    
      
         


      

      
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    ARTICLE
IV

    AMENDMENT
AND TERMINATION

    


    4.1          Amendments.  The
Board may amend this Plan any time, but no such amendment shall affect the
rights of, or reduce the benefits to, any Participant without their written
consent.

     

    4.2          Termination.  The
Board may completely terminate the Plan. Subject to the requirements of Code
Section 409A, in the event of complete termination with respect to such
benefits, the Plan shall cease to operate and the Bank shall payout to each
Participant his or her account as if that Participant had terminated service as
of the effective date of the complete termination. Such complete termination of
the Plan shall occur only under the following circumstances and
conditions:

     

    (a)           The
Board may terminate the Plan within 12 months of a corporate dissolution taxed
under Code section 331, or with approval of a bankruptcy court pursuant to II
U.S.C. §503(b)(1 )(A), provided that the amounts deferred under the Plan are
included in each Participant’s gross income in the latest of (i) the calendar
year in which the Plan terminates; (ii) the calendar year in which the amount is
no longer subject to a substantial risk of forfeiture; or (iii) the first
calendar year in which the payment is administratively practicable.

     

    (b)           The
Board may terminate the Plan within the 30 days preceding a Change in Control
(but not following a Change in Control), provided that the Plan shall only be
treated as terminated if all substantially similar arrangements sponsored by the
Bank are terminated so that the Participants and all participants under
substantially similar arrangements are required to receive all amounts of
compensation deferred under the terminated arrangements within 12 months of the
date of the termination of the arrangements.

     

    (c)           The
Board may terminate the Plan provided that (i) the termination and liquidation
does not occur proximate to a downturn in the financial health of the Bank or
Company, (ii) all arrangements sponsored by the Bank that would be aggregated
with this Plan under Final Regulations Section 1.409A-I(c) if the Participant
covered by this Plan was also covered by any of those other arrangements are
also terminated; (iii) no payments other than payments that would be payable
under the terms of the arrangement if the termination had not occurred are made
within 12 months of the termination of the arrangement; (iv) all payments are
made within 24 months of the termination of the arrangements; and (v) the Bank
does not adopt a new arrangement that would be aggregated with any terminated
arrangement under Final Regulations Section 1.409A-I(c) if the Participant
participated in both arrangements, at any time within three years following the
date of termination of the arrangement.

     

    (d)           The
Board may terminate the Plan pursuant to such other terms and conditions as the
Internal Revenue Service may permit from time to time.


    
      
         


      

      
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    ARTICLE
V

    UNFUNDED
ARRANGEMENT

    


    5.1     
    Unsecured General
Creditors.  The
Participant and Beneficiaries are general unsecured creditors of the Bank for
the payment of benefits under this Plan. The benefits represent the mere promise
by the Bank to pay such benefits. The benefits payable under this Plan are
payable from the general assets of the Bank and no special fund or arrangement
is intended to be established hereby nor shall the Bank be required to earmark,
place in trust or otherwise segregate assets with respect to this Plan or any
benefits hereunder.

     

    5.2          Rabbi
Trust.  The
Bank shall be responsible for the payment of all benefits provided under the
Plan. At its discretion, the Bank may establish one or more trusts, with such
trustees as the Board may approve, for the purpose of providing for the payment
of such benefits.  Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Bank’s creditors. To the
extent any benefits provided under the Plan are actually paid from any such
trust, the Bank shall have no further obligation with respect thereto, but to
the extent not so paid, such benefits shall remain the obligation of, and shall
be paid by, the Bank. Under no circumstances shall a Participant serve as
trustee or co-trustee of any trust established by the Bank pursuant to this
Plan.

     

    ARTICLE
VI

    MISCELLANEOUS

    


    6.1           No Guarantee of Continued
Service on the Board.  This
Plan does not constitute a guaranty of continued service on the
Board.

     

    6.2           Binding Effect.  This
Plan shall be binding upon the Bank, the Company and their successors and
assigns, and upon the Participants and the Beneficiaries and legal
representatives of the Participant.

     

    6.3           No Assignment.  Neither
the Participant nor any Beneficiary or personal representative of the
Participant can assign any of the rights to benefits under this Plan. Any
attempt to anticipate, sell, transfer, assign, pledge, encumber or change the
Participant’s right to receive benefits shall be void. The rights to benefits
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by
creditors.

     

    6.4           Choice
of Law.  This
Plan shall be construed under and governed by the laws of the State of Georgia,
except to the extent preempted by the laws of the United States of
America.

     

    6.5           Payment
to Guardians.  If a
Participant’s benefit is payable to a minor or a person declared incompetent or
to a person incapable of handling the disposition of his property, the Plan
Administrator may direct payment of such Plan benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or person. The Plan Administrator may require proof of incompetency, minority,
incapacity or guardianship as it may deem appropriate prior to distribution of
the Plan benefit. Such distribution shall completely discharge the Plan
Administrator and the Bank from all liability with respect to such
benefit.


    
      
         


      

      
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    IN WITNESS WHEREOF, the Bank
has caused this amended and restated Plan to be executed by its duly authorized
officer.

    


    
      
        	 
      	
                ATLANTIC
      COAST BANK

              
	 
      	 
      
	
                December
      11, 2009

              	
                By:

              	
                /s/
      Robert J. Larison, Jr.

              
	
                Date

              	 
      	
                Robert
      J. Larison, Jr. President and

              
	 
      	 
      	
                Chief
      Executive Officer

              


      

    


    
      
         


      

      
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